News for the East Bay's diverse, working-class majority.

Brought to you by the Democratic Socialists of America, East Bay chapter.

East Bay DSA

May 29, 2020

Rent is due June 1. It’s a good time to ask: are landlords essential?

By Isaac Harris

As the coronavirus ravages health systems and local economies across the United States, renters in particular have been hit hard. An estimated 50 million renters live in households impacted by immediate loss of jobs or income. And due to the country’s history of racial discrimination in property ownership, renters are disproportionately Black and Latinx.

In the Bay Area, housing costs are so high that relief from stimulus checks or unemployment benefits barely covers rent, leaving impacted families to choose between paying for food or handing over any savings they have to their landlord. This has led tenant groups to organize rent strikes while raising the question: why should landlords continue to demand rent while people in crisis struggle to meet their basic needs?

The media’s focus on the plight of tenants recently prompted the Los Angeles Times editorial board to consider landlords’ suffering, asking, “What about the landlords?” Besides the examples of evil and unlawful behavior — from gloating on social media about stealing tenants’ deliveries, to demands for sex in lieu of rent, to illegal evictions and lockouts — it’s true that landlords in general may find themselves in a tough spot.

But generally landlords are facing a hit to their profits, while tenants are at risk of losing a basic human need. In a rational society, we would be concerned with protecting people from the elements, not protecting profits from risk. But more importantly, the impending disaster for the entire housing market should lead us to question the function of landlords in the first place.

The fundamental difference between tenants and landlords during this crisis is that while landlords risk losing their real estate investments, tenants stand to lose their homes. Landlords signed up for this burden willingly; they made a choice to use their extra money to invest in housing, knowing that this choice carries significant risk during economic downturns. By contrast, tenants’ “choice” is more like the choice you make when a robber puts a gun to your head. Tenants either spend their limited income and savings on basic shelter, or else join the 150,000 Californians experiencing homelessness — a population that is extremely vulnerable to the coronavirus.

But landlords still feel that they are suffering. “Many property owners are in the same dire situation as their residents,” Bob Pinnegar, the president of landlord lobby the National Apartment Association, told MarketWatch, “[facing] substantial loss of income amid ongoing financial obligations.” When tenants lose income and don’t pay rent, landlords lose their ability to pay the mortgage, property taxes, building maintenance, and other costs. But in a capitalist landscape that favors property owners, these obligations are met with greater understanding than the inability to pay rent.

First, through the federal CARES Act, landlords with federally backed mortgages can request forbearance — meaning they can set up a payment plan or defer the missed payments until the end of the loan, without fees or penalties. This federal policy covers 70% of home mortgages. Meanwhile, tenants outside of a handful of protected cities will have to pay back all of their accrued rents as soon as federal and state eviction moratoriums end, or else landlords can begin to kick them out. Regardless, tenants nationwide are demanding the cancellation of rents and mortgages, so that we all have one less bill to worry about.

Second, property taxes in California have spared landlords ever since the passage of Proposition 13 in 1978. Prop 13 limits both the tax rate and annual tax increases on property. Since the market value of properties in California often increases more quickly than the 2 percent limit, most properties are taxed at well under their market value. This means many landlords can easily pay off the year’s property tax bill by collecting just one month’s rent from their tenants. 

Lastly, landlords benefit from a hugely influential lobbying arm in the state capitol — one that tenant organizations can only dream of. Groups like the California Rental Housing Association are already asking lawmakers for a bailout, while tenants pin their hopes for rent cancellation on a governor who has refused to enact a real eviction moratorium.

Landlords do not provide an essential service

The recent LA Times editorial claims, “We want landlords to stay in business. They provide an essential service: a roof over one’s head.” It’s true that if other essential workers like bus drivers, grocery clerks, nurses and farmworkers stopped their services, society would quickly fall apart. But if all landlords suddenly went out of business, would the roof of each tenant’s home collapse?

Obviously, besides typical building maintenance, the physical infrastructure of housing in the US is unaffected by the pandemic. COVID or no, the buildings will still be standing and available for inhabitants. The real “service” that landlords provide is controlling who gets to live inside. After all, these buildings were produced by the construction workers, architects and project managers past and present, not by the banks and landlords who end up as the “owners” of loans and real estate.

The basic maintenance, leasing and management of houses and apartments is certainly essential for society. But these functions have no inherent connection to property ownership — in fact, most property owners hire someone else to manage these tasks for them. Ultimately, the government or residents themselves could take on these responsibilities, without having an unnecessary middleman skimming off their extra income.

That extra amount, or the money left over after rents pay for property maintenance and debts, is unearned income. It’s money that flows to property owners just by virtue of the thing we call “ownership,” disconnected from any work that created and maintained the property itself. It’s the housing version of the way business owners pay workers the bare minimum wages needed to survive and then keep the rest of what those workers produce as profits for themselves.When property owners sell their assets at a profit, that money is also unearned. Increased property values usually have more to do with housing market conditions and public investment in city infrastructure, than with capital improvements.

Landlords: It’s not you, it’s capitalism

Ultimately, individual landlords are not at fault for the cruelty of a for-profit housing system. Even the most kind and generous people who own other people’s homes have a financial obligation to prioritize their property over their tenants’ lives. Landlords who cannot obtain mortgage forbearance during the pandemic may have no choice but to evict families who cannot pay and look for tenants who can. Capitalism transforms our social bonds into economic ones, erasing everyone’s humanity in the process.

Just as mass unemployment has shown us the absurdity of employer-based health insurance and the dire need for Medicare for All, tenants’ and homeowners’ current struggle to stay sheltered should make us challenge a housing system that is wedded to financial speculation. Tenants owe landlords, and landlords owe banks; only tenants organizing in solidarity can break this deadly financial food chain that refuses to pause during a global pandemic.

Breaking the chain means fighting for the cancellation of rent and mortgage payments — not just for those most impacted, but for everybody. Now is not the time for means-tested programs that will leave millions falling through the cracks. Breaking the chain also means demanding hotel rooms for unhoused people, with permanent homes down the line. And finally, it means a transformation of our for-profit housing system, starting with an expansion of social housing, and ending with a world where everyone has democratic control over the things that matter: the triumph of socialism itself.

Are you a tenant looking to get organized? Are you worried about paying rent? Fill out East Bay DSA’s housing survey here and we’ll get in touch with resources and training.